How do you feel every time you get your salary--gratified or disappointed? According to researchers, pay satisfaction really depends on what you think is “just enough,” and is a factor that can affect your life both in and out of the office.

In a study featured on, University of Illinois labor and employment relations professor Amit Kramer and her colleagues found that when an employee finds the level of pay that he considers sufficient, he automatically shifts from how much he can do with the money in his hands to other reference points such as the amount his co-workers are receiving.

"It becomes 'my pay' compared to others; 'my pay' compared to the effort I invest; 'my pay' compared to the things I give up and miss in life for the opportunity cost of working," Kramer explains. "Organizations believe that actual pay is the number one incentive for employees. While this may be true for some employees, for others the social aspects of pay and the things they perceive to be sacrificing for pay are stronger or act as additional incentives and disincentives."

A raise may increase pay satisfaction, but unfortunately, the effects only last until the employee gets used to it or until his needs get more expensive--like when he gets married or starts a family. When an employee begins to think and feel that his salary is not worth his effort, then he is more likely to have high levels of work-family conflicts.

To remedy this, Kramer says that companies will need to firm up their employee benefits and compensations. Human resources can suggest flexible work arrangements for all, but can also create policies based on specific employee needs. New programs may be expensive to launch, but in time, they will be worth it--employees stay happy and productive, and employers get to cut down on recruitment and training costs.

(Photo by Victor1558 via Flickr Creative Commons)

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